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Philippines hopes for windfall as basketball comes home in 2023

By Michael Angelo S. Murillo
Senior Reporter

MORE THAN 40 years since hosting the biggest hoops event in the world, basketball is coming home to the Philippines after the country, together with Indonesia and Japan, secured hosting rights for the 2023 FIBA Basketball World Cup.

The Philippines bagging the rights to host the International Basketball Federation’s (FIBA) World Cup is viewed positively for the potential windfall it can give beyond basketball, as the current government pushes initiatives in tourism, infrastructure, and other fields to speed up overall economic growth.

Coming off a failed bid to host the 2019 edition of the quadrennial basketball meet, which went to China, the group of the Philippines, Indonesia and Japan bagged last month rights to host the 2023 World Cup, beating Argentina and Uruguay which jointly submitted a bid.

It marked the first time that the world basketball governing body had awarded the hosting of the World Cup to more than one country, with games to be held back-to-back within Asia.

The Philippines will play host for the first time since the 1978 edition of the tournament in which Yugoslavia beat the Soviet Union in Manila.

Half of the 32 matches will take place in the Philippines while the remaining 16 will be played in Jakarta and Okinawa.

Playoff games all the way to the championship will be held in the country.

‘A BASKETBALL-LOVING COUNTRY’
“Winning the bid to host the FIBA 2023 World Cup together with Japan and Indonesia marks the country’s reemergence and rising prominence in the world of international sports,” Communications Secretary Martin M. Andanar said in a statement after the 2023 hosts were named on Dec. 9.

“We can expect this to spur tourism even further and provide added stimulus for businesses as well as investments.”

President Rodrigo R. Duterte — who met visiting FIBA officials in a courtesy call early last year — has expressed support for the initiative to host, spearheaded by the Samahang Basketbol ng Pilipinas, Inc. (SBP), seeing how it can unify the nation, apart from the benefits it can give the economy and to the sport of basketball.

The significance of the hosting beyond basketball is definitely not lost on SBP officials, on whose shoulders the event’s success now rests.

“We are a basketball-loving country so it is huge from a basketball perspective. Beyond basketball, foremost is showcasing the Philippines to the world that we are capable of hosting such events,” Alfredo “Al” S. Panlilio, SBP president, said in a recent interview with BusinessWorld.

“This is not the first time that we bid for it. We lost to China for 2019 but I think this time we had a compelling case along with Indonesia and Japan. As a group with Indonesia and Japan, we present more reach for FIBA to further the growth of the sport. We have a bigger market to promote products for commercial opportunities as well,” Mr. Panlilio added.

WELL-TIMED
“Hosting this event is a huge bonus for Filipinos. Knowing the culture we have of basketball, this event will greatly encourage many Filipinos,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said in a separate interview.

“In terms of its impact on the economy, it will definitely be huge as well. This type of hosting I would say would be equivalent to hosting the Miss Universe pageant or even more for the excitement, the hoopla and the energy it can generate,” he added.

“Definitely, first and foremost is the image that the country has in the international arena. This means that we are a country that is able to host such a magnitude of an event,” he explained.

“Secondly, it would be the tourism sector. This would be a great time to further promote the Philippines as a major tourist destination, knowing that only 8.6% of the economy comes from tourism as of 2016.”

The economist went on to say that the 2023 hosting should benefit from the current economic push, particularly the “Build, Build, Build” infrastructure development program of the Duterte administration which ends its six-year term in mid-2022.

“I think 2023 is the perfect time because of a lot of the big-ticket infrastructure projects that have been started and most probably which will be already (be) or almost (be) finished by then,” Mr. Asuncion said.

“If the current government plays its cards right and moves in the right direction, the country would be averaging about 7-8% GDP growth, which is a great complement to the hosting and vice-versa.”

The “Build, Build, Build” program — aimed at spurring economic growth to 7-8% annually from this year to 2022 from 2010-2015’s 6.2% — will see infrastructure spending increase to P1.899 trillion, equivalent to 7.45% of gross domestic product (GDP), in 2022 from a programmed P1.17 trillion, or 6.68%, this year.

The focus on infrastructure — particularly those aimed at easing traffic congestion like new roads, bridges, elevated highways and railways — is one of the things SBP is banking on to ensure the success of the Philippines’ hosting of the event.

“In 2015, I still feel we won that [bid]. We had a good presentation… but at that time we lost, aside from the bid price by China, also on infrastructure — they already have it built,” Mr. Panlilio noted.

The SBP official said as per agreement with FIBA, venues to be used for the hosting are Mall of Asia Arena in Pasay City, Philippine Arena in Bulacan and Smart Araneta Coliseum in Quezon City.

BENEFITS
On its Web site, FIBA cited four potential benefits of hosting FIBA events like the World Cup, namely: economic, sporting, social and capacity development.

Economic benefits come in the form of events’ impact on the overall economy and return on investment, branding on a global scale (advertising and sponsorship values), revenue opportunities (sale of tickets and local broadcast rights) and auxiliary events’ potential (associated events with economic value).

Take the case of Spain, for example, which hosted the last FIBA World Championship (now World Cup) in 2014.

An article published on the SportsBusiness Journal Web site on Dec. 5, 2014 — three months after the tournament — cited figures from a study by professional services provider Deloitte putting the value of its “total economic impact” for Spain at €408 million against an operational budget of €39 million to host the event then.

Economic impact included €75 million in taxes and €33 million in “direct profit to the State.”

An estimated €83 million came from more than 55,000 visiting basketball fans from around the world who spent on food, lodging and other items as they came to cheer for their national teams in the cities of Bilbao, Granada, Gran Canaria, Sevilla, Barcelona and Madrid.

A total of 672,000 spectators attended the 76 games, with the six venues filled to 80% of capacity.

Promotion of the FIBA Basketball World Cup started 500 days before the event began, with such activities taking place around the world between January 2012 and September 2014.

The article did not give figures on advertising revenues during the tournament, whose games were broadcast in 179 countries, but a separate FIBA release on Dec. 3, 2014 said presence of the event logo in the advertising campaigns of 24 event partners yielded €212 million in revenues.

The SportsBusiness Journal article quoted Spanish Basketball Federation President José Luis Sáez as describing it as “the biggest sporting event of the decade in Spain.”

“We have had an exemplary tournament leaving a unique legacy for Spanish basketball. We are not going to stop here; we want to remain leaders in the future.”

UNQUANTIFIABLE
Mr. Asuncion said the event should similarly be positive overall for the 2023 hosts, even if there are three of them this time.

“…[T]ourism is one sector that will benefit from the hosting. It’s like the Olympics in a way that people really trek to [the country]and watch. It’s a good opportunity to show the world that we are capable of hosting such events and change whatever bad perception they may have of the Philippines,” he said.

“It’s just the start and can eventually translate to investors gaining confidence in us and may want to come in and do business,” he added.

Moreover, relations among the Philippines, Indonesia and Japan “can be enhanced with this hosting, even if Indonesia is a competitor of ours within ASEAN,” Mr. Asuncion said, referring to the Association of Southeast Asian Nations.

“This is sports after all and can bring people together. Overall it’s going to be positive.”

Mr. Panlilio said SBP, including chairman emeritus Manuel V. Pangilinan who was part of the presenting team in the FIBA headquarters in Switzerland, was now moving to ensure maximum benefits from the event.

“Now that it has been awarded to us, I think it will be easier to talk to people or groups as far as sponsors and partners for the hosting,” said Mr. Panlilio, who is also the representative of the Manila Electric Co. (Meralco) team in the Philippine Basketball Association (PBA) board and is a senior vice-president for Customer Retail Services and Corporate Communications of the country’s biggest electricity distributor.

“The partnership with the government is very critical like that with the Department of Tourism as well as the (Cabinet) economic cluster, considering the amount of economic activity that the event will generate,” he added.

Mr. Panlilio said sectors that will likely ride on the 2023 World Cup include retail, tourism, telecommunications and property developers.

SBP is also looking at foreign companies that will likely take interest in the event.

“Companies like Samsung, Huawei and others from Indonesia and Japan maybe want to come on board,” Mr. Panlilio said.

“Across the PBA family, like from the San Miguel group, companies from the retail sector, tourism like hotels and resorts, developers like Megaworld (Corp.) maybe will be interested. Telecoms, too, since social media traffic is also expected to be big.”

EARLY START
Considering the magnitude of the task ahead, Mr. Panlilio said SBP has begun preparations, starting with the establishment of the local organizing committee that will be in charge of the technical side of the tournament as well as commercial and marketing aspects.

The same group is expected to travel to China to observe the conduct of the 2019 World Cup.

“A lot of work is ahead of us. We have to establish a local organizing committee team that will be bigger than the SBP which is used to running such events especially on the marketing side. We need experts to ensure the execution goes well, timelines are met and we don’t go beyond the budget,” Mr. Panlilio said.

For Mr. Asuncion, ensuring the event’s success will be a “matter of great planning and anticipation.”

“All sectors of society should work together… to ensure success and reap the benefits of the World Cup hosting,” he said.

“The support of government for the event should be top and foremost, from the President to the ordinary person helping this event.

For Mr. Panlilio, the fact that it took more than four decades for the Basketball World Cup to return to the Philippines is in itself significant.

“It is a once-in-a-lifetime event to host at this stage. It took a while for us to get this,” Mr. Panlilio said.

“FIBA has shown confidence in us to host and it’s not for nothing. So everybody must come on board and make this a success.”

Metrobank, BPI plan stock rights offers

TWO OF THE COUNTRY’S biggest banks are looking to conduct stock rights offerings (SRO) to fund their core business expansion and other operations.

Metropolitan Bank and Trust Co. (Metrobank) and Bank of the Philippine Islands (BPI) said in separate disclosures to the local bourse that they will offer their common shares to stockholders to raise fresh funds.

Metrobank said its board of directors approved to conduct an SRO to sell 819.83 million common shares, equivalent to the remaining unissued shares from the lender’s authorized capital stock.

Proceeds from the offer will be used to fund the Ty-led bank’s loans and fully acquire its credit card arm.

Metrobank said in October that it entered into an agreement with ANZ Funds Pty. Ltd. (ANZ) for the bank’s purchase of the latter’s 40% stake in credit card provider Metrobank Card Corp. (MCC).

MCC is a joint venture between Metrobank and ANZ formed in 2003, with the local lender holding the majority 60% stake.

In 2016, MCC reported total assets of P60.4 billion and a return on average equity of 36.3%.

Late last year, the lender bought a 20% stake in MCC from ANZ worth P7.4 billion, according to receipt of central bank approval obtained Dec. 29.

“The capital raising exercise is expected to enable the bank to pursue these business prospects to sustain the loan growth momentum, leveraging on the bank’s sales and distribution network that has rapidly expanded in the preceding years,” Metrobank said.

“Metrobank seeks to capitalize on the growth opportunities of large cap corporates and especially in its core franchise, the middle market and small to medium enterprises (SME) segments,” the lender’s disclosure read.

The bank also wants take the advantage of rising per capita levels, as this “[bodes] well for the potential in the growing consumer space, specifically in credit cards, auto loans and home mortgage.”

However, timing and size of the transaction is yet to be released, as these are still subject to other details such as offer price, receipt of regulatory approvals and market conditions.

UBS will serve as the joint global coordinator and joint bookrunner, while Metrobank’s First Metro Investment Corp. will serve as the joint global coordinator, joint bookrunner and issue manager.

BPI
Meanwhile, BPI said in its disclosure that its board of directors approved a rights offering which is expected to raise up to P50 billion.

The Ayala-led bank said the common shares will first be offered to eligible shareholders.

The final terms and conditions of the offer, including the issue size, entitlement ratio, offer price, record date, appointment of the parties and others, have yet to be determined, the lender noted.

“The bank expects to launch the rights offer after receiving required regulatory approvals,” BPI said.

“[T]he bank is conducing the rights offer in order to support the growth and strategic initiatives of the bank, including growing and strengthening its market-leading businesses and core franchises through the expansion of lending activities across consumer, SME, and microfinance segments…” it added.

It noted that it also intends to improve its infrastructure and will remain open to “inorganic growth opportunities.”

BPI said the offer will also improve the bank’s competitiveness and strengthen its capital base “as it seeks to pursue its growth strategy in the medium term.”

PSALM rejects P57.88-B prepayment from NGCP

By Victor V. Saulon, Sub-Editor

STATE-RUN Power Sector Assets and Liabilities Management Corp. (PSALM) said the P57.88-billion “prepayment” made by privately owned National Grid Corporation of the Philippines (NGCP) is not valid, in a rejection of an arrangement previously agreed by the two parties under the previous administration.

In a letter addressed to NGCP President and Chief Executive Officer Henry Sy, Jr., PSALM has informed the grid operator that its “remittance” of P57,883,053,062.96 made on July 15, 2013 “is not a valid prepayment under the CA (concession agreement) since at the time of payment, NGCP has outstanding obligations to the National Transmission Corp. (TransCo).”

“Accordingly, the attached Deferred Payment Amortization Schedule prior to the 15 July 2013 remittance would apply, such that, the maturities under the CA from January 2014 to January 2018 were settled using the P57.88-billion remittance of NGCP,” the PSALM letter read.

NGCP’s franchise came after the country passed Republic Act 9136 in 2001 or the “Electric Power Industry Reform Act of 2001” (EPIRA), which paved the way for the sale of government energy assets.

The law separated the different components of the sector, including power transmission, which was spun off to state agency TransCo ahead of its turnover to the private sector through concession.

Unlike outright sale, the concession agreement allowed the government to keep ownership of the transmission assets through TransCo. Payment of the concession fee is through PSALM.

Sought for comment, NGCP spokesperson Cynthia P. Alabanza said in a text message: “NGCP conducts its business in full compliance with its franchise under RA 9511, the concession agreement, and all laws, rules, regulations and other lawful issuances.”

“We are in receipt of a letter from PSALM on this issue, and we have referred the same to our lawyers for further study,” she added.

RA 9511 is the law that granted NGCP a franchise to engage in the business of conveying or transmitting electricity through a high voltage backbone system of interconnected transmission lines, substations and related facilities.

Melvin A. Matibag, TransCo president and chief executive officer, previously said he was against the prepayment because it deprives the government of interest earnings for the fees, which are paid twice yearly for the duration of the concession agreement.

NGCP won the 25-year concession in 2007 to operate the country’s power transmission network after an open, public and competitive bidding process. It officially started operations as power transmission service provider in 2009.

US tech industry revenue to reach $351 billion — CTA

THE US consumer technology industry,  which serves as a benchmark for the global tech industry,  is set to rake in a record-breaking $351 billion in retail revenues this year or 3.9% higher than 2017, according to new research from the Consumer Technology Association (CTA).

Released on Jan. 8, a day before the opening of Consumer Electronics Show (CES) 2018, the latest edition of the US Consumer Technology Sales and Forecasts noted that projection will be driven by “excitement about emerging technologies and the resilience of historically leading categories.” 

The report also includes for the first time a projection for consumer spending on music and video streaming services — valued at $19.5 billion in revenue, 35% higher than just last year. CTA added streaming services sales — which include internet-enabled services that deliver on-demand or linear video content (e.g., Netflix, Hulu and Sling TV) and on-demand audio content (e.g., Spotify, Pandora or Apple Music) — to better capture the full expanse of the ever evolving and expanding consumer technology market. Excluding the addition of streaming services, total industry revenue would increase by 2.2% in 2018.

“Technology is improving our lives in more ways than ever — and consumer enthusiasm is growing just as quickly as companies can bring their innovations to market,” said Gary Shapiro, CTA president and CEO, in a statement. “Our forecast incorporates several key economic factors including a strong stock market, continued job growth and stable rules for international trade to forecast these record-setting sales for breakthrough technologies and longtime market leaders alike. And the driving themes of 2018, including voice computing, artificial intelligence and connectivity that make our lives better and more efficient, will be on display across the show floor this week at CES 2018.”

CTA is the US’s largest tech trade association — its semi-annual report charts the size and growth of underlying product categories. The CTA consensus forecast reflects US factory sales-to-dealers for more than 300 consumer tech products.

EMERGING TECHNOLOGIES EXPAND
Overall, US sales of connected devices are projected to reach 715 million units in 2018 — a 6.6% increase year-over-year. Specific products projected to contribute significantly to this growth include smart speakers, smart home, virtual reality (VR), drones, and wearables. 

“Consumers are rapidly adopting new, emerging technology products — with voice-activated smart speakers as the stand-out of 2017 and 2018 — sparking growth in smart home devices, as voice interaction adds a new level of convenience and excitement to our lives,” said Brian Markwalter, senior vice president of research and standards, CTA. 

“At the same time, core categories – such as smartphones, laptops and TVs – continue to surpass expectations. 2018 will prove to be a milestone year for TVs, especially as LCD 4K UHD TVs make up half of all TVs sold in 2018.”

MATURING TECHNOLOGIES CONTINUING
The top five revenue categories will contribute just over half of total wholesale industry revenue (51%) in 2018.

Smartphones: Following the introduction of new flagship models from major manufacturers in 2017, smartphones will continue to anchor the industry and see slight growth in 2018. Unit volume will reach 189 million smartphones (two% increase) shipping in 2018, with revenues expected to reach $62.9 billion (three% increase).

Laptops: In 2018, the commercial and consumer laptop market will sell 50.1 million units, up three% over last year, and earn $28.4 billion in revenue. Convertible models remain a high-growth area within computing.

Televisions: Performing better than expected in 2017, unit sales of total digital displays in 2018 are projected to reach 44.2 million units (two% increase) and $22.1 billion in revenue (two% increase). Future category growth will be driven by next gen features.

4K Ultra High-Definition (4K UHD): For the first time, 4K UHD TVs will make up half of all total digital displays sold in 2018, with unit sales forecast to hit 22 million units (27% increase) generating $15.9 billion in revenue (14% increase).

Automotive Electronics: Factory-installed automotive technology, from driver-assist features to entertainment systems, is projected to contribute $15.9 billion in revenue (5.9% increase) – the result of strong automotive sales, propelled by a rising tide of tech, from sensors and artificial intelligence to safety and infotainment systems.

Tablets: After tremendous adoption in recent years, some tablet sales have been cannibalized by convertible, 2-in-1 laptops as standalone tablet adoption has leveled off and replacement cycles have slowed. Tablet sales will decline in 2018. CTA expects sales of 45.6 million units (12% decrease) and revenues of $12.5 billion (13% decrease).

CTA publishes the US Consumer Technology Sales and Forecasts twice a year, in January and July, reporting US factory sales-to-dealers. It was designed and formulated by CTA, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer technology industry. Multi-year projections cannot account for unpredictable factors such as changes in trade laws, interest rates and federal policy.

PSE acquires Tata Consulting’s shares in PDS Holdings Corp.

THE Philippine Stock Exchange (PSE) continues to increase its stake in the fixed equities bourse with the signing of a second share purchase agreement this week from one of the latter’s remaining stakeholders.

In a disclosure on Wednesday, the PSE said it has signed an SPA with Tata Consulting Services Asia Pacific Pte. Ltd. for the purchase of the 500,000 common shares it holds in Philippine Dealing System Holdings Corporation  (PDSHC), equivalent to 8% of its total issued and outstanding stock.

The shares were priced at P304.23 apiece, for a total purchase size of P152.11 million to be paid in full at the transaction’s closing. This is lower than the consideration of P320 per share the PSE has used in acquiring PDSHC shares from other stockholders.

“A one-time payment arrangement at a discounted price was agreed upon with TCS given its status as a non-resident foreign corporation,” the PSE said.

This is the second deal the PSE has signed this week, after it acquired San Miguel Corp.’s 250,000 shares in PDSHC for P80 million on Jan. 15.

In 2017, PSE also bought out the stakes in PDSHC held by the Bankers’ Association of the Philippines, Whistler Technologies Services, Inc., Investment House Association of the Philippines, the Philippine American Life and General Insurance, Co., and FINEX Research and Development Foundation, Inc.

With these transactions, the PSE has raised its stake in PDSHC to 69.03% of majority ownership. The deals will be completed after securing approval from the Securities and Exchange Commission (SEC), the Bangko Sentral ng Pilipinas, and the Philippine Competition Commission (PCC).

Other remaining shareholders in PDSHC include the Development Bank of the Philippines with 1.54%, the Social Security System with 1.54%, and the Investment House Association of the Philippines with 1.12%.

The local bourse previously said that it will be using the part of the proceeds of its stock rights offering to fund its acquisition of PDSHC. The PSE aims to raise up to P3.16 billion from the issuance of up to 11.5 million common shares priced at P275 each to eligible shareholders from Feb. 5 to 9.

The stock rights offering likewise aims to dilute the ownership of trading participants in the local bourse, a requirement the SEC has set for PSE to proceed with its merger with the PDS.

The PSE expects the two capital markets to be merged within the year, as it has already secured clearance from the PCC for the transaction.

PSE saw its net income attributable to the parent grow by 54% to P514 million in the first nine months of 2017, following an 8% rise in revenues to P953 million during the period.

Shares in PSE lost a peso or 0.41% to P241 each on Wednesday. — Arra B. Francia

Yields on central bank’s term deposits drop on strong demand for short tenor

By Melissa Luz T. Lopez,
Senior Reporter

SUSTAINED DEMAND for week-long term deposits drove yields even lower yesterday, although the central bank still opted to keep the month-long instruments off the market next week. 

Banks wanted to place as much as P125.564 billion under the term deposit facility (TDF) on Wednesday, more than triple the P40 billion which the Bangko Sentral ng Pilipinas (BSP) placed on the auction block. These bids steadied from the P127.119-billion offers received a week ago.

As a result, the average interest rate on these seven-day instruments slipped further to 3.028% from the 3.2223% fetched during the Jan. 10 auction. Banks sought returns from a narrow spread of 2.9375% to 3.1%, the central bank said yesterday.

The TDF is currently the central bank’s main tool to shore up excess funds in the financial system. The window allows banks to park the idle cash they hold under the BSP in exchange for a small margin, which is determined through weekly bids hosted by the central bank.

BSP Deputy Governor Diwa C. Guinigundo said they are allowing funds to “flow back” into the banking system coming from seemingly tighter liquidity conditions observed in December, as they kept the weekly offerings limited to the seven-day tenor for the fifth straight week.

“Funds absorbed by retail Treasury bonds actually end up with BSP and subsequently withdrawn by national government for financing their current operations and capital spending. That means funds go back to the banks when suppliers and creditors are paid by national government,” the central bank official clarified.

Mr. Guinigundo added that funds handed out as loans as well as cash withdrawn during the holiday season are also returning to the banks by way of payments and deposits, which armed lenders with more excess cash which they now place under the TDF.

Despite this, the central bank will only offer P40 billion worth of week-long term deposits next Wednesday.

“Once the process is assessed to have regularized, we shall recalibrate our offerings in order to ensure that liquidity levels remain appropriately available,” Mr. Guinigundo said.

The BSP stopped offering 28-day term deposits on Dec. 20 as market players preferred the shorter instrument over the Christmas season, which seasonally sees stronger demand for cash among depositors.

Mr. Guinigundo has said they will consider restoring the 28-day tenor in due time and possibly offer a new term which would be longer than a week but shorter than a month, in response to market demand.

BSP Governor Nestor A. Espenilla, Jr. said separately that the central bank is closely monitoring liquidity conditions as they search for an opportunity to reduce the 20% reserve requirement imposed on big banks.

“We want to substitute reserve requirements with open market instruments without necessarily increasing liquidity,” Mr. Espenilla told reporters on Tuesday, as he noted that money supply is “coming back” to the financial system.

‘Cha-cha dead in the Senate’ — Pro tem

By Camille A. Aguinaldo

THE SENATE president pro tempore on Wednesday warned that the priority agenda to revise or amend the Constitution is “dead,” based on the testimonies of legal experts, including two retired chief justices, who attended that day’s hearing by the Senate committee on constitutional amendments and revision of codes.

“Based on what I heard today, Cha-cha is dead in the Senate,” Senate president pro tempore Ralph G. Recto said at the hearing. “Clearly, we cannot do it in 10 session weeks, not to mention that there will be the possibility that the Senate will have to be an impeachment court once again, not to mention we have to pass other laws as senators, as members of Congress.”

There was also the constitutional question of whether the two chambers of Congress should vote separately (the Senate’s stand) or jointly (the stand of the House of Representatives). Not a few senators have warned that the Senate will not act on charter change if the House insists on its stand.

Former justices and legal experts invited to the hearing, some of them framers of the 1987 Constitution, also agreed that the best method to revise or amend the Constitution was through constitutional convention, instead of the more preferred constituent assembly among lawmakers.

“Should the amendment or revision regarding federalism and others be proposed by a constitutional commission or by the Congress itself as a constituent assembly? My answer is it should be by constitutional convention,” former justice Hilario G. Davide, Jr. said.

Former chief justice Reynato S. Puno said he had “misgivings” about the constituent assembly mode, citing the many legislative priorities on the plate of Congress.

He added that the justification on preferred constituent assembly as being cheaper than constitutional convention was “a cheap argument.”

“We should not count cost when writing the Constitution. Good Constitution is the best investment a people can make,” Mr. Puno said.

However, former senate president Aquilino Q. Pimentel, Jr. pointed out that while constitutional convention was the best mode to revise the Constitution, it was realistically “quite expensive” to accomplish.

“The more important thing that we, as a people, should consider doing, if the Constitution is being revised via a constituent assembly, is for us to participate in the process proactively, actively, and decisively,” Mr. Pimentel said.

Mr. Pimentel also said there was a need to revise the Constitution if the government intends to adopt a federal type of government wherein power is divided or shared between the central government and the local state governments.

On the other hand, former chief justice Hilario G. Davide, Jr. and former constitutional commissioner Edmundo G. Garcia opposed the revision of the Constitution.

For his part, former associate justice Adolfo S. Azcuna recommended the “more doable” option of amending certain areas of the Constitution first especially on economic provisions, before revising or overhauling the legal document.

“Should you amend or revise the Constitution? Yes, because it’s already 30 years. But amend it first, do not revise it. Revision is such a big word. You have many things to do,” Mr. Azcuna said.

Mr. Davide also rejected federalism, slamming the proposal as a “lethal experiment, a fatal leap, a plunge to death” and even a “leap to hell.”

“What our country and our people need today is not a change of the Constitution by adapting the federal system. What are needed are, first, authentic and genuine change in the hearts and minds and values of our leaders to the end that they be truly genuine, authentic public servants or servant-leaders,” he said.

In case constituent assembly is chosen, the legal experts concurred that the House of Representatives and the Senate should vote separately in a constituent assembly.

“When the bicameral convenes as constituent assembly, the intent, the tradition and the practice is to make both houses vote separately as independent institutions,” Mr. Puno said.

According to Article 17 of the 1987 Constitution, any amendment or revision to the Constitution may be proposed by calling for the Congress, upon a vote of three-fourths of all its Members, into a constituent assembly, by calling for a constitutional convention or by forming a peoples’ initiative.

The House on Tuesday adopted House Concurrent Resolution No. 9 to constitute both chambers of Congress into a constituent assembly to amend or revise the Constitution.

Members of the House of Representatives are pushing for charter change to pave way for President Rodrigo Duterte’s plan to shift the government system into federalism.

For his part, Senate Minority Leader Franklin M. Drilon said that senators during a Tuesday caucus unanimously maintained their stand that they should vote separately. “Yesterday, we have a caucus of the entire Senate. And the unanimous vote, no dissent, is that we should vote separately,” he said in an interview with reporters.

This consensus was also confirmed by both Senate President Aquilino L. Pimentel III and Senate Majority Floor Leader Vicente C. Sotto when sought for comment.

“The clear consensus in the informal caucus is that all senators believe that voting should be separately,” Mr. Pimentel said.

“The discussion yesterday was that if the House of Representatives would force a constituent assembly voting jointly, expect the Senate to not cooperate,” Mr. Sotto said.

Mr. Drilon also cited Senator Panfilo M. Lacson’s suggestion that any senator who would attend the joint constituent assembly be moved for expulsion, this in response to congressmen considering their constituent assembly to be a joint session even if one or two senators appear.

In an interview with reporters, Mr. Lacson said, “I told them that so our discussion is clear. Maybe we could agree to expel any member who would attend in that kind of arrangement without the benefit of a resolution adopted by the body.”

At the hearing, Mr. Drilon asked Mr. Puno if the Supreme Court could compel the Senate if the latter would not act on the House resolution that would convene Congress into a constituent assembly.

“The Supreme Court still does not have jurisdiction to accommodate and decide questions that are political in character. The issue that we are talking about is a political question,” Mr. Puno replied.

Mr. Drilon then asked the former chief justice what would happen if the Supreme Court could not intervene.

“The resolution is lost and you cannot be subject to a writ of mandamus,” Mr. Puno said.

Senator Francis N. Pangilinan, who heads the Senate committee, said for his part: “During the hearing, it was discussed that this should not be hurried, This should not be railroaded. We cannot exclude the public. That is what the committee is trying to accomplish which is to have a meticulous discussion on the proposals so it would not be hasty nor forced.”

SM Store goes cashless with PayMaya

PLDT, Inc.’s digital financial unit PayMaya Philippines is ramping up its presence in brick-and-mortar retail establishments, unveiling on Wednesday its partnership with The SM Store for cashless payments.

Under its partnership with the retail unit of the country’s largest shopping mall operator, PayMaya users can pay for their transactions just by opening the app and scanning Quick Response (QR) codes displayed at mobile pay lanes at The SM Store.

“SM has been an early partner of PayMaya as a load-up center for our customers, as well as a valued partner of our Smart Padala remittance service. This is a natural progression of our collaboration as we make it easier for our customers to use their PayMaya accounts anywhere they are in the country,” PayMaya Philippines President and Chief Executive Officer Orlando B. Vea said in a speech during the partnership’s official launch at SM Megamall in Ortigas.

For its part, the SM group acknowledged the partnership is a response to the changing landscape in the retail industry, as physical stores now have to compete with online shops.

“We now have to contend with social media, contend with influences like marketing, fast fashion, and services, and of course, online shopping. All of this is possible with the help of new technologies. In SM, we take pride in adapting to new technology and it would be a catalyst of change,” SM Store President Chelo C. Monasterio said during the event.

PayMaya has been launching a string of partnerships with various companies to pave the way for more cashless payments in the country.

Earlier this month, the company inked a deal with Golden Arches Development Corp., which operates the local chain of McDonald’s stores. PayMaya also partnered with Robinsons Retail Holdings, Inc. (RRHI) last November, allowing stores under the Gokongwei-led firm’s portfolio to use PayMaya’s QR scan-to-pay system for cashless payments.

On the other hand, PayMaya is also accepted for transactions in online marketplaces such as Lazada and Zalora, as well as in the online booking services of Philippine Airlines and Cebu Pacific.

GCash, the digital services arm of PLDT rival Globe Telecom, Inc., has also been ramping up expansion in physical retail establishments. GCash is an accepted mode of payment in Ayala-operated malls nationwide, as well as stores under RRHI such as Robinsons Department Store, Robinsons Supermarket, and merchant brands Topshop, Topman, Dorothy Perkins, among others.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Arra B. Francia

Peso plunges to one-month low

THE PESO plunged against the dollar on Wednesday as wider trade deficit and slow remittance growth dragged the currency down.

The local currency ended yesterday’s session at P50.705 against the greenback, 21.5 centavos down from its P50.49-per-dollar finish on Tuesday.

This is the peso’s weakest closing in over a month or since Dec. 6, when it closed at P50.71 per dollar.

The peso traded weaker the whole day, opening the session at P50.50 versus the dollar, which was also its best showing during yesterday’s session.

Yesterday’s intraday low was at P50.78 against the greenback.

Dollars traded spiked to $930.65 million yesterday, up from the $875.37 million that changed hands in the previous session.

“The peso was very weak [yesterday]. A lot of factors, actually. We saw disappointing figures from the OFW (overseas Filipino worker) remittances,” a trader said by phone.

Money sent home by overseas Filipinos stood at $2.262 billion in November 2017, higher than the $2.217 billion posted in a comparable year-ago period. However, the growth in remittances slowed to 2% from the 18.5% growth the same period in 2016.

“We saw disappointing figures… I think it was a reaction to the trade balance that we saw last week,” the trader added.

Data from the Philippine Statistics Authority released last week showed the country’s trade deficit hit a new record high in November at $3.78 billion, higher than the $2.81 billion booked in a comparable year-ago period.

Imports grew to $8.74 billion by 18.5%, while outbound shipments grew at a slower pace to $4.96 billion by 1.6%.

Meanwhile, a second trader said: “Oil is still trading at the high, therefore demands for dollars to buy oil helped the dollar to strengthen against the peso.”

A third trader meanwhile said the local currency depreciated due to “bets of stronger US industrial production data” scheduled for release last night.

For today, one trader said the peso may play within P50.55 to P50.75 against the dollar while the other trader sees the pair trading on a wide range between P50.50 and P50.90. The third trader said the local currency may move within P50.65 to P50.85-to-the-dollar.

“The dollar remains to be weak against the major currencies, but if we see some pickup in the US dollar, I guess this will fuel dollar-peso buying,” the first trader said.

Most Asian currencies also slipped on Wednesday as the dollar rebounded from a three-year low.

The dollar index against a basket of six major currencies  was up 0.2% at 90.569 after hitting its lowest since December 2014 at 90.113. — Karl Angelo N. Vidal with Reuters

Press freedom in PHL partly free — world index

THE PHILIPPINES was rated partly free, as was press freedom in the country, in a global environment marked by democracy in crisis, according to the 2018 world freedom index released by Freedom House.

Findings by the independent watchdog organization have concluded that “Democracy faced its most serious crisis in decades in 2017 as its basic tenets — including guarantees of free and fair elections, the rights of minorities, freedom of the press, and the rule of law — came under attack around the world.”

“The United States retreated from its traditional role as both a champion and an exemplar of democracy amid an accelerating decline in American political rights and civil liberties,” Freedom House also noted, adding that 71 countries “suffered net declines in political rights and civil liberties, with only 35 registering gains. This marked the 12th consecutive year of decline in global freedom.”

A full report has yet to be released on the Philippines, but in a score range of 1 (most free) to 7 (least free), the country scored 3/7 in terms of freedom, political rights, and civil liberties.

The Philippines’ aggregate score was 62/100, with zero being the least free and 100, the most free.

The country’s net freedom status was categorized as “free,” but its press freedom status was deemed “partly free.”

Forty-five percent (45%) of the world’s nations were rated free, 30% partly free, and 25% not free. Thirty-nine percent (39%) of the world’s population were deemed free, 24% partly free, and 37% not free.

SWS: Q4 self-rated poverty 3 points down

THE NUMBER of families considering themselves as mahirap or poor dropped 3 points to 44% (est. 10.0 million) in the Social Weather Stations’ (SWS) Fourth Quarter 2017 Social Weather Survey, after an increase to 47% in September that year.

From the period of December 2016 to September 2017, the proportion of self-rated poor families decreased once, in June, to 44%, after a steady rise from 44% in December 2016 to 50% in March the following year.

Self-rated poverty (SRP) in 2017 had an average of 46%, 2 points short of the record-low average 44% the previous year, SWS said.

“The December 2017 survey also found 32% (est. 7.3 million) of families rating their food as mahirap or poor, termed by SWS as Food-Poor,” the survey said. “This is unchanged from the 32% (est. 7.4 million) in September 2017.”

Self-rated food poverty (SRFP) in 2017 had an average of 33%, 2 points above the record-low 31% of 2016. Meanwhile, the median Self-Rated Poverty Threshold (SRPT) — the monthly budget that a poor household needs for home expenses in order not to consider itself poor in general — is P15,000, from the P10,000 threshold in President Rodrigo R. Duterte’s first year in office and throughout much of the term of his predecessor Benigno S. C. Aquino III. The December median SRPTs by area are P20,000 in Metro Manila, P14,500 in Balance Luzon, P15,000 in the Visayas, and P10,000 in Mindanao.

The latest SRPTs for Metro Manila, the Visayas, and Mindanao are the highest recorded values in those areas, SWS noted, whereas the SRPT for Balance Luzon was previously surpassed by P15,000 in June 2017.

The median Self-Rated Poverty Gap (SRPG) — the amount poor families lack in monthly home expenses relative to their stated threshold — was unchanged at P5,000, or one-third of SRPT. The December 2017 median SRPGs by area are P5,000 in Metro Manila, P6,000 in Balance Luzon, P5,000 in the Visayas, and P5,000 in Mindanao. The latest SRPG for Balance Luzon increased, while other SRPGs remained steady or decreased compared to September 2017.

Except for the unchanged Self-Rated Poverty Gap, these values are higher in December 2017 compared to September 2017, SWS noted.

The national median Self-Rated Food Poverty Threshold (SRFPT) — the monthly budget that a food-poor household needs for food expenses in order not to consider its food as poor — is at P6,000. The national median Self-Rated Food Poverty Gap (SRFPG) — the amount food-poor families lack in monthly food expenses relative to their stated threshold — is P3,000, or half of SRFPT. The December 2017 median SRFPTs by area are P7,500 in Metro Manila, P6,000 in Balance Luzon, P5,500 in the Visayas, and P5,000 in Mindanao. The latest figure for the Visayas is the highest recorded value for that area. Compared to September 2017, figures in Balance Luzon and Mindanao stayed the same, while it declined to a near record-low in Metro Manila. The December 2017 median SRFPG for poor households is P3,000 in Metro Manila, P3,000 in Balance Luzon, P3,000 in the Visayas, and P2,000 in Mindanao. The latest SRFPG for the Visayas is a new record-high for the area. SRFPGs in all other areas remained the same as in September 2017.

RECORD LOW
SRP’s fourth-quarter nationwide decline was due to a sharp decrease of 10 points in Balance Luzon (to 40%) and slight decrease of 3 points both in Metro Manila (28%) and the Visayas (53%), offset by an increase of 7 points in Mindanao (52%).

Balance Luzon had an average self-rated poverty of 43% in 2017, 3 points higher than the 40% in 2016. Visayas had an average SRP of 58% for 2017, 3 points higher than the 55% in 2016. And Mindanao had an average SRP of 52% for 2017, 1 point above the 51% in 2016. Metro Manila had a record-low average SRP of 31% for 2017, 1 point lower than the 32% in 2016. “This happened only once before, in 1987,” SWS said.

The steady nationwide SRFP in the fourth quarter was due to 2-point increases in Mindanao (to 38%) and Metro Manila (22%), combined with a 6-point decrease in the Visayas (32%), and a steady score in Balance Luzon (32%). Balance Luzon had an average SRFP of 33% for 2017, 5 points above the record-low 28% in 2016. Visayas had the same average SRFP of 37%, as in 2016. And Mindanao had a record-low average SRFP of 36% for 2017, 2 points below 38% in 2016 and 2010. Metro Manila had a new record-low average SRFP of 20% for 2017, 1 point below the previous record of 21% in 2016. The survey was conducted from Dec. 8 to 16, 2017, using face-to-face interviews of 1,200 adults (18 years old and above) nationwide: 300 each in Metro Manila, Balance Luzon, Visayas, and Mindanao (sampling error margins of ±2.5% for national percentages, and ±6% each for Metro Manila, Balance Luzon, Visayas, and Mindanao).

Aguirre directs NBI to probe Rappler

JUSTICE SECRETARY Vitaliano N. Aguirre II on Wednesday directed the National Bureau of Investigation (NBI) to probe possible violations by online news site Rappler of the 1987 Charter and other laws in connection with a finding by the Securities and Exchange Commission (SEC) that Rappler had allowed a foreign entity to exert “negative control” over it.

In an order, Mr. Aguirre said the NBI, “through Director Dante A. Gierran, is hereby directed and granted authority to conduct investigation and case buildup over possible violations of the Constitution and laws.”

The Department of Justice chief also directed NBI to file, “if the evidence warrants,” appropriate cases “against those found liable.”

The SEC on Monday voided Rappler’s registration as a business entity over such alleged violations of the Constitution, a move that Rappler — and subsequently certain media and human rights groups — denounced as a blow to press freedom, because it effectively shuts down the Web site.

Malacañang, however, said it had no hand in the action of the SEC, which it described as a collegial body of competent people with no political agenda.

Presidential spokesman Harry L. Roque, Jr. who said he taught constitution law for 15 years, also gave unsolicited advice: Rappler’s journalists can continue blogging and thus there is no curtailment of press freedom. However, he did acknowledge that as bloggers they may need to secure prior accreditation. — News5/interaksyon.com

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